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EMC Corp (NYSE:EMC)
Beneish M-Score
-2.85 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

EMC Corp has a M-score of -2.85 suggests that the company is not a manipulator.

EMC' s Beneish M-Score Range Over the Past 10 Years
Min: -3.74   Max: -1.85
Current: -2.85

-3.74
-1.85

During the past 13 years, the highest Beneish M-Score of EMC Corp was -1.85. The lowest was -3.74. And the median was -2.77.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of EMC Corp for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.9919+0.528 * 1.0217+0.404 * 0.9581+0.892 * 0.9997+0.115 * 1.0015
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0389+4.679 * -0.0748-0.327 * 0.9939
=-2.85

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $2,941 Mil.
Revenue was 5475 + 7015 + 6079 + 5997 = $24,566 Mil.
Gross Profit was 3260 + 4360 + 3705 + 3587 = $14,912 Mil.
Total Current Assets was $14,600 Mil.
Total Assets was $45,703 Mil.
Property, Plant and Equipment(Net PPE) was $3,806 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,920 Mil.
Selling, General & Admin. Expense(SGA) was $8,482 Mil.
Total Current Liabilities was $11,286 Mil.
Long-Term Debt was $5,477 Mil.
Net Income was 268 + 771 + 480 + 487 = $2,006 Mil.
Non Operating Income was 17 + 73 + 47 + 50 = $187 Mil.
Cash Flow from Operations was 932 + 1870 + 1403 + 1033 = $5,238 Mil.
Accounts Receivable was $2,966 Mil.
Revenue was 5613 + 7049 + 6032 + 5880 = $24,574 Mil.
Gross Profit was 3339 + 4505 + 3743 + 3654 = $15,241 Mil.
Total Current Assets was $12,563 Mil.
Total Assets was $43,293 Mil.
Property, Plant and Equipment(Net PPE) was $3,742 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,892 Mil.
Selling, General & Admin. Expense(SGA) was $8,167 Mil.
Total Current Liabilities was $10,481 Mil.
Long-Term Debt was $5,495 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2941 / 24566) / (2966 / 24574)
=0.11971831 / 0.12069667
=0.9919

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(4360 / 24574) / (3260 / 24566)
=0.62020835 / 0.60701783
=1.0217

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (14600 + 3806) / 45703) / (1 - (12563 + 3742) / 43293)
=0.59726933 / 0.62338022
=0.9581

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=24566 / 24574
=0.9997

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(1892 / (1892 + 3742)) / (1920 / (1920 + 3806))
=0.33581825 / 0.33531261
=1.0015

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(8482 / 24566) / (8167 / 24574)
=0.34527396 / 0.33234313
=1.0389

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((5477 + 11286) / 45703) / ((5495 + 10481) / 43293)
=0.36678117 / 0.3690204
=0.9939

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(2006 - 187 - 5238) / 45703
=-0.0748

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

EMC Corp has a M-score of -2.85 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

EMC Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.0431.14970.86820.99281.00450.97221.0771.05151.0860.8916
GMI 1.01370.97250.98611.0010.93660.96930.96841.00780.99891.0282
AQI 1.06980.83831.01811.13871.14640.96441.030.91721.05071.0334
SGI 1.15431.1861.12440.94281.21311.17591.08531.06951.05251.0108
DEPI 1.06790.91550.92490.99051.03020.94551.02181.010.97780.9995
SGAI 1.08151.01411.04591.05920.96421.02510.99610.97961.03361.0576
LVGI 1.69210.92060.97520.89460.98871.0070.88871.38570.99411.0505
TATA -0.061-0.0832-0.0913-0.0839-0.0859-0.0929-0.0876-0.0824-0.0775-0.0773
M-score -2.79-2.63-2.93-2.85-2.65-2.83-2.71-2.91-2.70-2.93

EMC Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.05151.01070.98751.01781.0860.9440.95530.95750.89160.9919
GMI 1.00781.00841.00781.00750.99891.00431.01211.01621.02821.0217
AQI 0.91720.99131.12241.07841.05071.04470.99431.02381.03340.9581
SGI 1.06951.05941.05691.06661.05241.0541.04711.02761.01080.9997
DEPI 1.011.01190.99040.96930.97780.9670.98270.99450.99951.0015
SGAI 0.97960.99841.0211.02121.03361.03641.02421.03881.05751.0389
LVGI 1.38571.29020.9590.95260.99411.09391.15751.131.05050.9939
TATA -0.0809-0.081-0.084-0.0798-0.0775-0.0812-0.0775-0.0751-0.0772-0.0748
M-score -2.90-2.89-2.77-2.73-2.70-2.88-2.90-2.88-2.93-2.85
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